How to find closest object with matching y position?

I suggest you keep all those 'blocks' in a list, and then you can search through the list using this algorithm:

 private GameObject GetClosestGameObjectWithSameYAxis(GameObject source)
 {
     // comparing floating points with equal isn't always very correct because floats can become inaccurate, hence the tolerance
     var tolerance = 0.01f;
 
     // _blocks will be your list of game objects
     var blocks = _blocks.Where(a => Math.Abs(a.transform.position.y - source.transform.position.y) < tolerance).ToList();
 
     GameObject closest = null;
     float closestDistance = float.MaxValue;
 
     foreach (var block in blocks)
     {
         var distance = Vector3.Distance(source.transform.position, block.transform.position);
         if (distance < closestDistance)
         {
             closest = block;
             closestDistance = distance;
         }
     }
     return closest;
 }